COMMENTARY No. 57

a CANADIAN
SECURITY INTELLIGENCE SERVICE publication

SMUGGLING SPECIAL NUCLEAR MATERIALS

May 1995

Unclassified

Editors Note:

Ever since the collapse of the former Soviet Union, reports have
circulated with increasing frequency concerning attempts to smuggle materials
from that country's civil and military nuclear programs. Such an increase
obviously raises a number of concerns (outlined in the authors' introduction),
chief among which is the possibility that these materials might eventually fall
into the hands of proliferant states or terrorist groups.

Commentary this month is a co-authored issue: Dr. A. Robitaille
was most recently the Director of Scientific and Technical Intelligence with
DND; Mr. R. Purver, formerly Research Director at the Canadian Centre for Arms
Control and Disarmament, is presently a Strategic Analyst with CSIS.

Disclaimer: Publication of an article in the COMMENTARY
series does not imply CSIS authentication of the information nor CSIS
endorsement of the author's views.

Introduction

Attempts to smuggle special nuclear materials (i.e., those of significance
to a nuclear weapon program) continue to increase throughout Eastern Europe.
Further, available data reflect only those unsuccessful attempts which have been
intercepted by the appropriate authorities. Troubling questions remain. How
many other cases of such smuggling have been successful and remain undetected?
To which countries are these materials being shipped? Why are such curious
materials being offered up for sale? Is the risk to Western countries real and
serious, or is it instead little more than a nuisance in international
relations? Have the police themselves created an artificial demand through
efforts to prevent it? Is there a genuine possibility that a rogue country like
Iran might actually succeed in the construction of a clandestine nuclear weapon?
Or worse yet, a terrorist organization such as Hamas? Some of these questions
must, for the time being, remain unanswered, but others are worthy of
consideration, and are discussed further below.

Significance of materials being smuggled

Reports of the trafficking of Red Mercury (claimed to have the composition
Hg2Sb207) have been circulating for many
years. Red Mercury was touted as a mediator in nuclear weapons design,
particularly as an essential ingredient in pure-fusion weapons, a view expressed
most recently in International Defence Review (6/94) by Dr. F. Barnaby,
a former Director of the Stockholm International Peace Research Institute. What
is known about Red Mercury is that it was the Russian code name for the
production of Li6D  a legitimate component of thermonuclear
weapons, but not some mystical or magical ingredient for other purposes. In
recent years Red Mercury has been widely discredited, and the "market"
for it appears to be diminishing.

Of the nearly 1000 known incidents of smuggling, all but a handful have been
of isotopes or materials entirely useless to nuclear weapons manufacture, thus
reflecting the technological ignorance of both the supply and demand sides of
the "market". However, four prominent exceptions were of truly
special nuclear materials and all occurred within the last eight months of 1994.
In May 1994, six grams of plutonium  Pu239 (99.75% purity) 
were found in the garage of businessman Adolf Jaekle, in the southern German
village of Tengen. In another case, six people were arrested in June 1994 in
the Bavarian town of Landshut with 0.8 gram of weapons-grade uranium  U235
 for sale. Although the isotopes were certainly weapons-grade, the
quantities involved were fortunately minuscule. In August 1994 at Munich
Airport, 350 grams of 87% pure Pu239 were discovered aboard a flight
from Moscow, and three couriers arrested; 200 grams of lithium (Li6)
were confiscated at the same time. Both of these materials are required in the
construction of thermo-nuclear weapons, and the amounts are significant. In the
case of the plutonium, this amounts to almost 10% of the fissionable material
required in an (admittedly) efficient weapon design. Finally, in December 1994,
in the largest seizure yet of weapons-grade uranium, Czech officials in Prague
confiscated 2.722 kilograms of U235 enriched to 87.5%, and arrested
three men later identified as "nuclear workers". As in the case of
the earlier German seizures, the materials were believed to have originated in
the former Soviet Union (FSU), although Russian authorities have stridently
denied that any of their weapons-grade material has gone missing.

Statistics on the overall incidence of nuclear smuggling vary according to
the source, with some counting confirmed hoaxes or cases involving materials not
generally considered harmful. Nevertheless, all appear to agree that the number
of incidents is growing and represents a disturbing trend, especially in
qualitative terms. For example, the New York Times in February 1995 cited a "Western
European intelligence report" to the effect that the number of cases of
actual or attempted nuclear smuggling from former communist countries reported
to Western governments had more than doubled in 1994, to 124 from 56 the
previous year and 53 in 1992. Furthermore, of the 1994 cases, a total of 77 had
involved uranium or plutonium rather than "more harmless materials".
For its part, the German federal criminal police (the BKA) recently reported
that it had investigated no fewer than 267 cases of "illicit traffic in
nuclear or radioactive materials" during 1994, compared to 241 in 1993, 158
in 1992, and just 41 in 1991. In short, the threat has clearly become serious
enough that it can no longer be ignored or discounted.

Sources and smuggling routes

Ever since the breakup of the USSR, concerns have been expressed that
fissionable materials from its civil and military nuclear programs would find
their way onto the black market where they could be obtained by would-be
proliferant states or even terrorist groups. Such concerns have increased as
economic conditions in the FSU have further deteriorated, with sagging morale in
the military and insufficient (or non-existent) pay for workers in key
industries and facilities, as well as the dramatic rise of organized crime.

Russian authorities continue to deny that weapons-grade materials seized in
the West originated in their country. They have, however, admitted the theft of
substantial quantities of highly-enriched uranium within their own borders. For
example, it was reported to an Interpol meeting in May 1994 that Russian
authorities had arrested two persons the previous March in St. Petersburg in
possession of 2 kg of U235 enriched to 98%, presumed to have come
from a "nuclear plant" east of the Urals. Russian Interior Minister
Viktor Yerin told an international crime conference in Naples in November 1994
that 80 crimes relating to the illegal traffic of radioactive substances had
been committed in the previous two years, including 32 thefts, but that none of
the material had been suitable for weapons and none of the thefts had been from
a "defence complex". Other reports put the number of cases much
higher, but tend to agree that most, if not all, thefts have involved civil
rather than military installations. Finally, a British television report in
February 1995 quoted Russian sources as saying that their federal
counter-intelligence service (the FSK) had seized a total of 212 kg of uranium
fuel stolen from nuclear plants, and 8 kg of weapons-grade uranium, during 1994.

By one estimate, there are 950 sites for enriched uranium and plutonium in
the FSU, including research institutes, weapons laboratories, assembly plants,
power plants, nuclear waste storage sites and naval fuel depots. In many cases,
physical security measures are reported to be seriously inadequate, while the
accounting is said to be so poor that authorities are unaware of the precise
amount and nature of materials in their possession. For example, until
recently, the Kurchatov Institute of Atomic Energy in Moscow, housing hundreds
of kilograms of nuclear materials, had no inventory controls, portal-monitoring
system, or adequate fencing. According to one American official, "there
was nothing to stop thieves from backing up a truck and loading what they wanted".
A Russian naval officer on trial in Murmansk for having stolen 4 kg of
20%-enriched U235 in November 1993 has described how he simply
walked straight into a poorly guarded storage area in Severomorsk (headquarters
of the Russian Northern Fleet), forced a padlock on a door, and walked out with
several canisters of nuclear fuel rods. Such reports hardly lend credibility to
the protestations of Russian officials that they have the situation under
control.

As noted earlier, all but one of the cases of weapons-grade material seized
in the West have occurred in Germany, while the number of other incidents there
appears higher than in other countries. This has led to some skepticism about
why smugglers would choose Germany as the preferred route, given its better
criminal intelligence and more efficient police forces. One possible answer
would be the availability of the large sums demanded by smugglers. However, the
issue also intruded into the German federal elections in the fall of 1994, with
the opposition charging that the problem had been exaggerated, and incidents
actually manufactured to improve the image of the incumbent government and allow
it to pass stricter security regulations.

Seizures of illicit nuclear materials have in fact been reported in a
variety of other countries, including Switzerland, Poland, Turkey, Romania, the
Czech Republic, Hungary, Bulgaria, Austria, Italy, Belgium, Sweden and India, as
well as in the FSU. The Baltic states are said to be a preferred route for
smugglers, given the laxity of their border controls. Many observers have
pointed out that the FSU's southern borders are even more porous, and are in
some cases directly adjacent to potential state customers, leading to
speculation that there may be much greaterthough undetectedtraffic
through Central Asia.

Potential customers

Hitherto it has been the conventionally accepted wisdom that the clandestine
construction of a nuclear weapon was beyond the capabilities of individuals,
terrorist organizations, or even smaller countries. This view has persisted
since World War II, primarily because of the immense effort by the USA at the
time to produce one non-deliverable nuclear device (Gadget) and two nuclear
weapons (Little Boy and Fat Man)an effort which required tens of thousands
of dedicated workers, billions of dollars, the construction of two very large
research establishments (Oak Ridge and Los Alamos), many smaller ones, and four
years.

If there is any lesson to be learned from the recent South African
experience, however, it is that this perception no longer remains true, if
indeed it ever did. South Africa's program was truly modest in scale, but was
characterized by perseverance, patience and technical competence. In the
beginning the program employed only about 100 personnel, of whom 40 were
directly involved and only 20 actually in weapons construction. Even at the
termination of the program (in 1989), a total of fewer than 300 were involved.
At completion the program was designed to have the capacity to manufacture only
two weapons per yeara production rate small enough to remain undetected by
other countries. Secrecy was paramount; thus South Africa chose to make the
program as self-reliant as possible, and depended little upon imported
equipment. Most of the equipment which did have to be imported was not
proscribed by international nuclear export controls, but in many cases did
violate international sanctions imposed as a result of its policy of apartheid.
What was required from foreign sources was the fundamental "intellectual
infrastructure", and many of its key staff members were sent abroad (to the
USA and Europe) for graduate education in the scientific disciplines required by
the program. (A similar process was followed by Iraq, and unfortunately by many
other countries attempting to develop weapons of mass destruction.)

Smuggled nuclear materials could be acquired either by states seeking a
short-cut to a nuclear weapons capability (or an augmentation of existing
stocks), or by terrorist groups. Given the technical difficulties encountered
by a number of states in large-scale and relatively well financed efforts to
acquire nuclear weapons, as well as the extremely high prices quoted for nuclear
materials on the black market, many observers are skeptical about the likelihood
of terrorist groups being able to acquire a nuclear explosive capability.
However, radioactive materialsin much smaller quantitiescould be
used for terrorist purposes to contaminate a water supply or render unusable a
particular area or facility. Although some types of contamination may be more
difficult to achieve than commonly believed, most analysts agree that, given the
widespread public "allergy" to nuclear material in whatever form, the
mere threat of such use of radioactive materials could be a
potent terrorist tool.

A more likely destination for smuggled nuclear materials would be the
weapons program of a nation-state. A sufficient supply of fissionable materials
is usually considered the primary obstacle to a new state's acquisition of a
nuclear weapons capability. The acquisition of smuggled material might also
allow a state to forego the construction of plutonium production, reprocessing
and/or enrichment facilities, thereby effectively concealing its program from
outside eyes and achieving strategic surprise. Finally, the acquisition and
transport of highly radioactive materials by ill-trained and/or ill-equipped
smugglers may pose a serious public health problem, as evidenced by the
controversy surrounding the seizure at Munich Airport.

Sources in both Russia and the West maintain that, despite the apparent
abundance of "sellers" in the nuclear black market, there appear to be
relatively few "buyers" at the moment (other than journalists seeking
a sensational story, or government undercover agents attempting to gauge the
extent of the problem and to put a stop to it). Concern has been expressed that
German authorities in their zeal to expose smugglers may have artificially
created a market where none exists. German prosecutors have denied newspaper
reports that the Spaniards arrested in Munich were suspected of having ties with
the Basque separatist group ETA. Reports have persisted of documents showing
that Saddam Hussein is trying to buy weapons-grade material on the European
black market, and that a shipment of smuggled plutonium may have been sent to
Pakistan. Iran, Libya and North Korea have also reportedly been named by German
authorities as possible "buyers". However, the "Western European
intelligence report" referred to earlier, as well as recent public remarks
by senior American officials, suggests the lack of any conclusive evidence so
far of the involvement of any foreign states in the trade.

International efforts to reduce nuclear smuggling

The seizures in Germany in 1994 prompted a flurry of diplomatic activity to
come to grips with the nuclear smuggling problem. Initially, they also caused
some acrimony in relations between Russia and its Western partners, with Moscow
accusing the latter of seeking to place Russian nuclear programs and facilities
under supranational control, or at least to gain unfair advantage in the
international nuclear market. Nevertheless, on 22 August 1994, Germany and
Russia signed a memorandum aimed at improving bilateral co-operation to prevent
the smuggling of nuclear materials. This included the establishment of a "hot
line" between the relevant authorities, the exchange of information on
cases, the possibility of mutual participation in analyzing seized materials,
and joint promotion of an international agreement on the prompt notification of
future cases. Subsequently, the issue was discussed both between various
Western states and former republics of the Soviet Union, and in a number of
high-level multilateral forums, including meetings of the European Union foreign
and interior ministers, the International Atomic Energy Agency (IAEA), Interpol,
and the new European police agency, Europol.

President Yeltsin moved to demonstrate the seriousness of his government's
attempts to deal with the problem by announcing in late August 1994 the
establishment of an inter-agency commission headed by Sergei Stepashin, director
of the counter-intelligence service. Further, on 15 September 1994, Yeltsin
issued a decree to improve the "system of registration, conservation and
control of nuclear materials". Among other things, it called for a prompt
review of the accountancy and physical security situation; designated
Gosatomnadzor (GAN), the Nuclear Control Commission, as the supreme agency in
this area, reporting directly to the president; and called for priority
budgeting in the fiscal year 1995 budget. Nevertheless, reports have persisted
of divisions within the Russian bureaucracy over the magnitude of the problem
and the degree to which Western concerns should be accommodated. The most
powerful player, the Ministry of Atomic Energy (Minatom), has been described as
being "not at all helpful in this regard". At least part of the
problem is the multiplicity of Russian agencies having control over fissile
materials (unlike in the West), including Minatom, the Ministry of Defence and
even the Ministry of Shipbuilding (in regard to naval reactor fuel). Moreover,
suspicions linger about widespread corruption and involvement in the trade at
the highest levels of the Russian bureaucracy.

At their general conference in September 1994, the members of the IAEA
expressed "deep concern" over the problem and called on Agency
Director General Hans Blix to strengthen the IAEA's role in this area. The
agency convened a meeting of 96 experts from 46 countries and 3 international
organizations in Vienna in November 1994. They endorsed greater IAEA
involvement in such matters as aiding states to improve their national systems
of accountancy and control, as well as physical protection of materials; and
developing a reliable data base on incidents to assist decision-makers and
better inform the public. However, the availability of the necessary funds
remains a problem.

The United States has been a leader in publicizing the issue, regarding it
as a severe threat to its own (as well as international) security. Until
recently, however, the rather extensive Nunn-Lugar program for the "denuclearization"
of the states of the FSU had failed significantly to improve fissile material
protection, control and accounting in Russia, due in part to disagreements
between the two governments. A laboratory-to-laboratory effort administered by
the US Department of Energy in 1994 was more successful, leading to improvements
by the end of the year at the Kurchatov Institute in Moscow. On 20 January
1995, Minatom agreed to co-operate for the first time with the USA in the
physical protection and accounting of nuclear materials, beginning with six
facilities. However, critics charge that the effort is still "too little,
too late", given the gravity of the problem.

Other related efforts by the USA and/or its allies aimed at least partly at
preventing smuggling include the creation of International Science and
Technology Centers (ISTCs) in Moscow and Kiev to provide support to former
weapons scientists; and "Project Sapphire"  the November 1994
transfer from Kazakhstan to the USA of 600 kg of poorly guarded, highly enriched
uranium (HEU). Regarding the latter operation, however, one critic has pointed
out that the material in question represented only .05% of the total amount of
weapons-usable material in the FSU!

Long-term disposition of fissile materials

Approximately 500 metric tons of U235 and 300 tons of Pu239
from dismantled weapons and other sources must eventually be disposed of as a
result of various arms control agreements currently being implemented in the
FSU. These materials represent a proliferation potential of some 60,000 nuclear
weapons.

In discussing options available to governments to deal with this problem,
one must make a clear distinction, for technological reasons, between uranium
and plutonium. Uranium is one of the most common elements found in the Earth's
crust. It powers universally the 450-odd nuclear power plants currently
operating in the world. There is already a well-established, legitimate,
international market for the material. The fissionable isotope (U235)
can, in principle, be readily blended-down with natural or depleted uranium (U238)
to the same levels of enrichment as used in power-plant fuel. Once so diluted,
the material is no more of a proliferation concern than natural uranium, since
isotopic enrichment is an extraordinarily difficult process.

On the other hand, plutonium does not exist in nature, and Pu239
cannot merely be diluted with other isotopes to make it proliferation-resistant.
Blending-down with other elements is no solution either, since separation of
the original plutonium would require chemical, rather than physical, processing
which is, at least in principle, considerably less difficult. Finally, but not
the least importantly, the word "plutonium" itself is so highly
emotive that there are very few Western governments prepared even to discuss
participating in its disposal, for purely political reasons. Yet the material
exists, it represents a threat to the world and it must be dealt with.

It is no wonder, therefore, that there has been a flurry of international
activity among governments (West and East) to deal with weapons-grade uranium,
for both political and commercial reasons, and such an aversion to dealing with
the plutonium problem.

Uranium

On 28 August 1992, Russia and the USA agreed to transfer from Russian
inventories 500 metric tons of weapons-grade uranium to the USA for dilution
into reactor fuel over the next 20 years. Over the subsequent two years, much
progress was made between the two countries towards resolving difficulties
associated with this transfer, primarily having to do with the issue of "transparency";
namely, developing methods and procedures to ensure that neither country could
surreptitiously divert any of this material back into a weapons program. (One
wonders why either would ever want to, since they both have the same disposal
problem and a serious over-supply of existing weapons.) In any event, the final
Implementing Contract was signed on 1 January 1994 by Presidents Clinton and
Yeltsin in Moscow. This contract, between the United States Enrichment
Corporation and Techsnabexport, has a value of (US) $12 billion. Regular
shipments were to begin in late 1994, although some had been made earlier to
develop and verify handling procedures. Thus, it can be reasonably assured that
(barring thefts) the Russian stockpile of U235 will eventually be
disposed of in an orderly way, with satisfactory material accounting and control
procedures, and that there is little Canada can do to assist further in this
effort.

Plutonium

The much more vexing question remains, however: what to do with 300 tons of
highly radioactive, extremely toxic material that some would argue has no
legitimate commercial value and is useful for little else than the potential
production of 50,000 nuclear weapons? This issue has been on the table for some
three years now, with little progress evident to date. As we have seen, a
clandestine market is emerging to fill the void left by government inaction and
ineptitude, and international tempers are becoming frayed as a result.
Virtually all political leaders have recently emphasized the importance of
dealing swiftly with the problem, to pre-empt potentially disastrous
consequences, but it has led to little more than political posturing. Partly as
a result of the recent controversy over the seizures of illicit material in
Germany, a Siemens (Germany) initiative to build a mixed-oxide fuel plant in
Russia (to burn up Pu as nuclear reactor fuel) has all but been killed
politically, much to the consternation of German arms control authorities, who
were vigorously recommending this option.

At a much more rational level, the American government contracted with the
National Academy of Sciences (NAS) to develop policy options to deal with the
disposition of weapons-grade plutonium. The NAS final report was released on 24
January 1994 and did much to put the issue into its proper perspective. While
public opinion has concentrated more on the ultimate fate of the material, the
NAS chose instead to emphasize the short-term questions, which should be
resolved as soon as possible to contain the menace. The NAS noted that nuclear
weapon technology is so widespread now that access to information is no longer a
substantial barrier to proliferation. Rather, the principal technical barrier
is access to fissile material itself (a conclusion reinforced by the South
African experience, discussed previously). The NAS recommendations included:

(1) establishing a reciprocal régime of monitored net reductions in
the stockpiles of nuclear explosive material;

(2) agreeing on the methods and the locations of secure interim storage of
nuclear-explosive material from dismantled nuclear weapons; and

(3) superseding interim storage as quickly as possible with measures to
minimize the accessibility of the plutonium for re-use in weapons by the
imposition of substantial radiological, chemical and logistic barriers.

Regarding the ultimate disposition of weapon plutonium, the NAS identified
two leading options which could be implemented quickly to minimize present
security dangers (many others were discarded as requiring too much technological
development before implementation, which would have introduced unacceptable
delay). The two options that emerged practicable, commercially, reliably and
safely, in the short term, were the following:

(1) the burning of mixed-oxide (uranium and plutonium) fuel in existing or
future commercial nuclear power plants around the world. (For a variety of
technological reasons the Canadian CANDU design is the best-suited of all the
world's reactor types to burn plutonium, as already demonstrated at the Chalk
River Nuclear Laboratories of AECL); and

(2) the mixture and glass-vitrification of plutonium with already processed,
high-level radioactive waste.

Proponents of the first option point out that this would recapture some of
the very substantial energy already consumed to produce the material initially,
and that long-term storage of nuclear waste in glass-vitrified form has yet to
be demonstrated satisfactorily. Proponents of the second option argue that this
would render the material no more accessible than the plutonium already present
in spent reactor fuel, and that any commercial use of plutonium is inherently
bad since it might eventually lead to the legitimization of plutonium recycling
and thus an enduring "plutonium economy". Nevertheless, both options
are available and could begin to be implemented very quickly, if the political
will would permit it.

Conclusions

There exists at the present time a dangerous quantity of fissile materials
potentially available for the construction of nuclear weapons. The underlying
economic and social conditions that make the FSU a particularly threatening
environment in this regard are unlikely to change for the better in the near- or
even the medium-term. Important elements of the nuclear infrastructure there
are said to be resisting controls more intrusive than those already in place,
which are widely believed to be grossly inadequate. As increasing numbers of
nuclear weapons are dismantled under the terms of already negotiated arms
control agreements (as well as unilateral reductions), hundreds of tons of
additional fissile material will become available and subject to transport
(where it may be most vulnerable to interception).

The only real technological barrier to the clandestine construction of
nuclear weapons is access to fissionable material itself. There is a growing
black market for this material, and eventually demand will result in enough
material reaching as-yet unidentified buyers to produce a nuclear weapon, if the
world community continues to procrastinate as it has to date. In the meantime,
terrorist threats of contamination using radioactive substances gain enhanced
credibility as the number of smuggling incidents continues to rise. Eliminating
the menace will be difficult, especially politically, but action must be taken
sooner rather than later in order to minimize the short-term threat. Finally,
Canada is very well placed, at least technologically, to make a substantial and
an enduring contribution to world peace in this area, given resolute leadership.

The views expressed herein are those of the author, who may be contacted by
writing to :